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FTSE, Europe Sanguine In Face Of OECD’s Global Alarm Bells

Published 06/03/2019, 11:54
Updated 21/10/2020, 09:15

Though the markets had plenty of reason to despair on Wednesday, they instead settled for something altogether blander and more subdued.

The OECD became the latest institution to ring the Brexit alarm bells. It stated that the UK economy is expected to grow 0.8% in 2019, just shy of half the already paltry 1.4% posted last year. And that’s with a deal; without and the OECD warned the UK could plunge into a recession that would ‘generate sizeable negative spillovers on growth in other countries’.

Britain wasn’t the only nation dealt a worrying report card by the OECD. For 2019, China is now expected to see GDP of 6.2%, 0.1% lower than November’s forecasts and a significant drop from 2018’s 6.6%; the US is estimated at 2.6% against last year’s 2.8%. As for the Eurozone as a whole, the region is forecast to grow by a measly 1%, mainly due to the faltering economies of Germany and Italy.

Yet, despite all this, the markets were pretty sanguine as Wednesday went on. The FTSE nudged 0.1% higher, allowing it to knock on the door of 7200 for the first time in over a week, as the pound dipped 0.2% against the dollar and the euro. The DAX, meanwhile, was only down 0.2%, with the CAC slipping 0.1%.

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